Bull s
JK Holdings
Quarterly Report

January,2019
CONTENTSInternational

Overview of the Financial
Results for JKHD for theSecond Quarter of the Fiscal
Year Ending in March, 2019
Housing Starts totaled in 491,400 units（a decline of1.1% from the same period of the previous year）forthe second quarter of the ﬁscal year. Housing Starts
for owner-occupied, which are our main markets,slightly decreased by 1.2% from the same period of theprevious year to 146,400 units.
In this type of business environment, we haveenhanced sales of lumber and precut in the basic
materials sector and have tackled expansion of sales
to strengthen and improve proﬁts in the sector ofBulls and J-GREEN items, which are our private
brands. Concerning the building materials and housing
equipment, entire sections of our group have worked
on functional enhancements of engineering businessto promote sales and improve proﬁtability of theoverall building materials business in accordance

P153No.

Overview of the Financial Results for JKHD
for the Second Quarter
KEYTEC's Construction of their Yamanashi
Plant
P2 Prospect of Business Conditions for
January-March
P3 Market Outlook of Plywood
6th annual Plywood Day was held
P4 Efforts made by JK Timber EngineeringGroupKeiichiro Aoki

President
JK Holdings Co.,Ltd.

with receiving orders for materials and work from
distribution, remodeling, and non-residential buildings
markets.
As a result, the net sales increased to 172.585 billion
yen（2.0% increase compared to the same period ofthe previous year）, the operating proﬁt saw 2.332
billion yen（11.9% decrease）, and the ordinary income
found 2.208 billion yen（16.5% decrease）. The current
net income for the quarter that is attributable to theparent company shareholders was 1.167 billion yen（22.0% decrease）.
Our annual targets for the ﬁscal year ending March
2019 show a net sales of 350 billion yen, operating
proﬁt of 5.2 billion yen, ordinary income of 5.0 billion
yen, and current net income of 3.0 billion yen that is
attributable to the parent company shareholders.

Company
KEYTEC s Construction of
their Yamanashi Plant
KEYTEC Co., Ltd. has announced the outlineof KEYTEC Yamanashi Plant which isscheduled to be completed in March 2019
and the progress of the construction. The
site area of the new factory is about 22,000
tsubo, and a timber yard with a capacity of
20,000 cubic meters for logs is prepared on
the premises to start storing logs from April
2019. The material logs will be procured fromnearby prefectures, mainly of Japanese larch,
red pine, and Japanese cedar from Yamanashi
Prefecture. The consumption of material logs
is expected to be 120,000 cubic meters per year. TheYamanashi Plant will accept 2-meter and 4-meter logs
with a diameter of 14 centimeters or more at the cut
end, since it requires 1.5 times the amount of logs that
the Kisarazu Plant does. The new plant can deal withrather large-diameter logs up to 60 centimeters.
It is planned to output 68,400 cubic meters of softwood
plywood annually, which is 3.42 million sheets of
12-millimeter thick of 3 x 6 size equivalent.

Bulls International No.53

2Survey

5% to 8%）. January-March 2019 isjust before another consumption
tax increase（from 8% to 10%）,where the market will begin to be
conscious of last-minute demand.
Analyzing the results by area,
both builders and distributors
predicted that the demand inwestern Japan including the areasof Chubu, Kinki, Chugoku, Shikoku
and Kyushu will increase, whichshowed almost the same tendency
as housing starts in September.
The reason is probably thatreconstruction of houses and nonresidential buildings which wererepeatedly hit by natural disasters,
have begun to gain momentum inwestern Japan.
The declining birthrate, aging
population, inheritance problem,
unoccupied house problem,
energy saving measures and theenvironment surrounding theindustry are unchanged. We will
be watching how
clearly the peak oflast-minute demand0.3will be in the next
market research.

Prospect of BusinessCondition forJanuary-March<Forecast of Demands byBuilders and Distributors>
According to a recently publishedreport, builders demand forecast
for January-March 2019 increased
from minus 5.7 points in theprevious research（for OctoberDecember 2018）to plus 0.3
points and distributors forecast
increased from minus 3.7 points
to plus 1.9 points, both of which
turned to positive for the ﬁrst
time in about three years since theresearch for April-June 2016.
April-June 2016 was the period
where the market was recoveringfrom slackness caused by aconsumption tax increase（fromDemand Forecast by Builders
20-2-4-5.4-6-7.3

2017-5.7-8.1-7.0-8-9.0-10 Jan-Mar-6.1-9.1
Jul-Sep
2017

Jan-Mar2018

Jul-Sep
2018<Sales Forecast by Leading
Manufacturers>
Sales forecasts bymajor manufacturers

Point0=business result in April-June,1992

260

-6.2

-5.6-6.0-5.5-6.3

57-9.1
Jul-Sep
2017

2017

Precut lumber

58-8-10 Jan-Mar

Laminated lumber

59-3.7-5.1

Jan-Mar2018

Jul-Sep
2018

This forecast（for January-March 2019）isbased on the totaled data gathered from 3,000
client companies in Japan through interviews
which took place from late October to midNovember 2018.

610-6

The remodeling and renovation
business were prospected to bemoving upward all over Japan.
By area, replies from all districts
excluding the Hokuriku area said,
the business will be brisk . The
number of low-budgeted businessis slightly increasing, which may
be showing the sign of last-minutedemand. To the questionnaire
concerning last-minute demand,
majority of the answers said, thesituation will remain the same ,but in the next research（forApril-June）, the result may show
some changes.

Dealing Volume of Lumber

1.9-4<Current Status of
Remodeling Business>

Jan-Mar2019

Demand Forecast by Distributors-2

showed a sharp decline in forecasts
for declining in the ceramic andthermal insulation ﬁeld, with anincrease prediction of 35%. Plywood
and residential equipments accountfor more than half of the previous
year's forecasts, but woodenbuilding materials are predicted toincrease and predicted to decreaseby 35% each. Wood（solid lumber,laminated wood, LVL, precut）areall predicted to increase sales.

LVL

56 Jan-Mar

Jan-Mar2019

2017

Solid lumber
Jul-Sep
2017

Jan-Mar2018

Jul-Sep
2018

Jan-Mar2019

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Jan-Mar 2019）
increaseover15％
Plywood（13ﬁrms）

14 〜 10％

below10％level-oﬀ

decrease
below10％10 〜 14％

over15％

0.0

0.0

21.8

59.0

19.2

0.0

0.0

0.0

1.3

33.8

29.8

26.3

6.3

2.5

0.0

1.8

33.0

51.8

13.4

0.0

0.0

House Equipments（9ﬁrms）

0.0

1.4

25.0

47.2

26.4

0.0

0.0

average

0.0

1.1

28.4

47.0

21.3

1.6

0.6

Wooden Building Materials（10ﬁrms）
Ceramic/Heat Insulation（15ﬁrms）

International No.53

Trend
Market Outlookof Plywood<Trends in new construction starts>

The number of new housing
starts started in October 2018
was 83,330（100.7% compared tothe same period of the previousyear）,and the cumulative numberof new housing starts in January
to October was 779,793（97.1%
compared to the same period of
the previous year）.

<Trends of Japanese domestically
produced plywood>
The domestic coniferous plywoodproduction volume in October 2018
was 263,500 cubic meters（98.4%compared with the same period
last year）, the shipment amountwas 279,600 cubic meters（102.4%compared to the same periodlast year）. As shipment volumes
increased, production volumes fellslightly, so the inventory amounted
to 163,200 cubic meters, turning todecrease for the ﬁrst time in ninemonths.
It s the highest record on
shipment volume, and the supply
volume of non-structural plywood
is steadily increasing.
As Southeast Asian materials arerising, demand for ﬂoor baseboards
and plywood for concrete-form
has become obvious and we
expect to be on an upward trend.
Regarding plywood for structural
use movement has been slow due
to various natural disasters andlabor shortages, but has started
to move and it is expected thatstrong demand will continue in theyear. By the end of the year there
is also the possibility that it willdevelop to a situation of shortagedue to lack of truck transportation.

<Trend of Imported plywood>
The amount of imported plywoodin October 2018 was 276,000 cubic
meters（119.2% compared withthe same period last year）. Due tothe typhoon that hit the Japanesearchipelagos in September, eﬀected

the quantity which was expected
to arrive in September and it
was shifted to October and was
dramatically increased.
Looking at the arrivals by countryof origin, 110,055 cubic meters（125.5% compared to the same
period of the previous year）fromMalaysia, 84,800 cubic meters fromIndonesia（116.6% compared withthe same period of the previousyear）,55,500 cubic meters in
China（101.5% compared with thesame period last year）. However,
the items are not overﬂowing
in the market, as the arrivals inSeptember were extremely small.
It is expected the gradual rise in
the domestic market prices willkeep going, while shipments arevigorous as ﬁrm housing starts tocontinue.

Wholesalers' Prices of Plywood in Tokyo
2500

yen/sheet

Imported Plywood（Structural Use）
Imported Plywood（Concrete Form）
Domestic Plywood［Softwood Plywood for Structural Use(12mm)］
Domestic Plywood［Softwood Plywood for Structural Use(24mm)］

2000

1500

1000

5000Jul 2018

Aug 2018

Sep 2018

Event
6th annual Plywood
Day was held

The ceremony for the 6th annual"Plywood Day" took place in
Shinkiba tower on November 2nd,
2018. 250 participants gatheredfrom lumber, plywood, and othercompanies and organization.
Mr. Fumio Kamiya, Chief TechnicalOﬃcer of the Seihoku Corporation
was awarded as a person ofmerit and received an award fromthe Director General of Forestry
Agency.
He worked for the Forestry andForest Products Research Institute,
where he studied how to use
plywood in frame construction thatcan satisfy seismic performance,
and to use plywood in large-Bulls

scale wooden buildings. Afterthe Southern Hyogo Prefecture
Earthquake, there was a growing
momentum to address theearthquake resistance of buildings.
At the request of the Structural
Plywood Promotion Association of
the Tokyo Plywood Manufactures'
Association（formally known as
the KP Group）, he developed aconstruction method that uses
24mm and 28mm thick structural
plywood for ﬂoor without joists.

Oct 2018

Nov 2018

Dec 2018

Additionally, he did extensive
lobbing for it to be permitted bybuilding regulations as well as
promoted it across Japan. Afterhe retired from the Forestry andForest Products Research Institute,he became a member of a plywood
manufacturer, and continued todevelop products and technologies
for structural plywood at theTokyo Plywood Manufactures'
Association and Japan Plywood
Manufacturers' Association andshared the results.
Owing to these activities, demandfor softwood structural plywood
increased steadily and productionof domestic plywood exceeded
3,200,000 cubic meters in 2017.
Mr. Kamiya is also praised forhis contribution to the increasing
demand of Japanese timber bydeveloping products.

3

4Bulls International No.53

CompanyEﬀorts made by JK Timber Engineering GroupThe JK Timber Engineering Group along with theJK Holdings Group and six of its subsidiaries（JapanKenzai Co. Ltd., Akita Glulam Co. Ltd., KEYTEC,Meirin Co. Ltd., Miyamori Co. Ltd., Butsurin Co. Ltd.）
have been promoting the utilization of wood for
middle and large-scale wooden buildings and interiors.
These companies' cooperative eﬀorts have led to rapid
growth since 2015 and are expected to reach 4 billion
yen in 2019.
One big advantage point is its Comprehensive
Strength . The collaboration of six company s
strength, sharing information and technologies hashelped it establish a total system from structuraldesign to execution of management of the building
frame. This allows us to handle project in a quickmanner.
In Japan, there is an increasing amount of momentum
towards utilizing lumber as a material for newconstruction other than residential housing, because
the distribution amount of lumber has increased inline with state policies and lumber s ﬁre-resistancehas improved as well. In addition, the industry s
needs have shifted from steel to lumber due to steel s
increased pricing. JK Timber Engineering Group willkeep growing.

Eastern Saitama Regional Development Center Fureai Cube

Wooden structural members: laminated lumber and LVL
Eastern Saitama Regional Development Center Fureai Cube is a complex facility constructed by a joint project between the Saitama
Prefectural Oﬃce and the Kasukabe City Oﬃce for promotion of industries as well as activities and interaction of local residents. Asa cutting-edge model of CO2 reduction, it leads the public facility sector for the future, aiming to be a symbol of attractive community
development where people and nature are close together.

Chichibu Kodomo-En (Early Childhood Education and Care Center)

Wooden structural members: Japanese larch structurallaminated lumber and structural plywood of Japanese softwood
The school building is designed based on the intention of theprincipal who wants to provide early childhood education at afacility surrounded by wooden materials that bring friendly andcomfortable atmosphere. For the interior, adopted are wooden
sash as well as wooden furniture and ﬁttings. Exposed wooden
walls are used for the exterior.
Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3833
E-mail kouhou@jkhd.co.jp
URL http://www.jkhd.co.jp
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